EAP - The Pacific Infrastructure Challenge - World Bank (2006).pdf

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Box 7.3: Expert Panels can Improve Accountability Regulation helps to improve accountability when the private sector is involved in providing infrastructure services. But many Pacific countries are resource constrained, and may not have the skills or budget to implement an independent regulatory agency. Instead, some countries may benefit from regulating service provision through a contract. This is the approach adopted in Vanuatu, where water and electricity services are provided by a private operator, UNELCO. A government department is responsible for overseeing performance under the UNELCO contract. While this approach may work well for most regulatory activities, it does not always provide the best incentives for accountability during periodic tariff reviews. Tariff reviews require a high level of expertise, discretion and judgment. It is important that tariff reviews are not subject to political influence. Shugart and Ballance suggest using independent, non-governmental Expert Panels for greater accountability. The key features of this concept are: The government does not have the power to unilaterally select the members of the Panel Candidates are shortlisted by a respected, independent, non government organization. Members are selected through a process involving the public authority and the utility, which have an equal say The Panel manages and ultimately decides on periodic tariff reviews The Panel also serves as an appeals body for any decisions taken by the regulatory authority. Source: “Expert Panels: Regulating Water Companies in Developing Countries” C Shugart & T Ballance, June 2005 7.2 There are Some Ways to Overcome these Barriers Improved infrastructure will only be achieved and sustained in the long term with institutional arrangements and governance structures that offer incentives for good performance and provide for coordination. In Figure 6.2 we propose a decision framework for infrastructure reform, which attempts to address barriers to coordination and accountability. 42
Figure 7.2: Decision Framework for Sector Reform Benchmark Performance Reform Required No Leave ‘As Is’ Yes Choose Reform Option Public Sector Reform Private Sector Involvement Coordinate Regulation Governance Put Oversight Mechanisms in Place to Support Reform Competition Community Balance Fiscal Priorities Source: Castalia There are some key elements to this framework: The first step is to identify whether reform is actually necessary, and if so, what type of reform is required. Benchmarking sector performance against other Pacific and comparator countries will tell governments whether the sector is performing relatively well or relatively poorly. It will also identify the specific challenges to overcome in each sector, for which the reforms can then be designed. Where performance is acceptable, no reform is needed Depending on the specific issues identified, the next step is for governments to select the appropriate mix of reforms. These may include reforming the public sector, introducing private sector involvement, introducing competition or a regulatory regime which simulates competitive pressures where there are dominant or monopoly providers in the infrastructure marketplace, an independent Court system, or a mixture of these solutions Regardless of the reform option selected, governments need to put in place sufficient oversight mechanisms to encourage good performance and discourage poor performance. This may include independent performance audits, contract monitoring, regulation or community oversight The government needs to give infrastructure development appropriate priority in budget allocation, both to ensure an efficient mix of investment and maintenance, and to provide subsidies which achieve the “biggest bang for the buck” in terms of infrastructure outcomes Finally, all relevant policies, plans and implementation mechanisms must be fully coordinated. Regional coordination can help to overcome some of the natural challenges to good infrastructure performance faced by Pacific countries. 43
Page 2 and 3: The Pacific Infrastructure Challeng
Page 4 and 5: Table of Contents 1 Acronyms and Ab
Page 6 and 7: Figure 8.4: Annual Per Capita Inves
Page 8 and 9: Box 7.9: ECTEL - Regulatory Coopera
Page 10 and 11: kWh MDG MIAA MIPA MNOC MOTCA MOU MP
Page 12 and 13: 2 Executive Summary This discussion
Page 14 and 15: Fiscal, regulatory and policy decis
Page 16 and 17: Figure 2.2: Estimated Annual Invest
Page 18 and 19: 3 What’s the Purpose of the Discu
Page 20 and 21: Box 4.2: Improving Infrastructure f
Page 22 and 23: 5 How well are Pacific Countries Pe
Page 24 and 25: Figure 5.1: Access to Electricity 1
Page 26 and 27: Water tariffs are often too low In
Page 28 and 29: Table 6.1 shows that in addition to
Page 30 and 31: These characteristics mean that Pac
Page 32 and 33: 6.2 Challenges to Institutions and
Page 34 and 35: 6.2.2 Demographic Issues in the Reg
Page 36 and 37: These high rural populations mean t
Page 38 and 39: Figure 6.3: Comparison of Defining
Page 40 and 41: Lack of legal and regulatory suppor
Page 42 and 43: 7 Challenge: How do we Lift Perform
Page 44 and 45: 7.1.2 Poor Policy Design and Coordi
Page 46 and 47: different, some efficiency may be g
Page 48 and 49: Figure 7.1: Accountability in Infra
Page 52 and 53: Some of these reforms have already
Page 54 and 55: 7.2.2 Choose an Appropriate Reform
Page 56 and 57: Box 7.5: Public Sector Reforms in t
Page 58 and 59: Pacific countries, management salar
Page 60 and 61: There are three classic types of pr
Page 62 and 63: While private sector involvement ma
Page 64 and 65: Air services would also benefit fro
Page 66 and 67: 7.2.5 Regional Coordination One opt
Page 68 and 69: 8 What’s the Size of the Challeng
Page 72 and 73: Figure 8.5: Mainlines Trend 0.600 N
Page 76 and 77: Figure 8.11: Total Annual Per Capit
Page 78 and 79: 9 How do we meet the Challenge This
Page 80 and 81: Box 9.3: Can private sector involve
Page 82 and 83: Box 9.6: How can the public sector
Page 84 and 85: The proportion of mainline access a
Page 86 and 87: Box A.2: Introducing Telecommunicat
Page 88 and 89: Universal Access Universal access r
Page 90 and 91: good example of this. The Kiwi Shar
Page 92 and 93: Figure A.7: Reported Faults per 100
Page 94 and 95: Table A.1: Institutional Indicators
Page 96 and 97: and there have been calls to recons
Page 98 and 99: A.2 Electricity Sector Analysis A s
Page 100 and 101:
Figure A.10: Average Electricity Ta
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Figure A.11: Economies of Scale in
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interest rate relief on a US$9m loa
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As Figure A.14 shows, Vanuatu perfo
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Table A.3: Industry Structure and G
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Regional Cooperation in Electricity
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A.3 Water and Sanitation Sector Ana
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Figure A.17: Availability of Water
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Figure A.20: Staff per 1000 Connect
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including full operating expenses a
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Corporatization is often employed t
Page 122 and 123:
operating costs, collections levels
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Figure A.25: Road Network Density v
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Federated States of Micronesia at b
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In Samoa: Samoa’s Public Works De
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Many Pacific countries already outs
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4. Domestic and Pacific Island serv
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Figure A.31: TEU Throughput Levels
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system reduces cargo handling effic
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Economies of Scale Port operations
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The landlord model is the most comm
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Fiji 84 Ports The Maritime and Port
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Apia Port has become one of the bes
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Kiribati 90 Ports The Kiribati Port
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In Shipping: Services are considere
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Figure A.36: Total Passenger Throug
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Airline Services Figure A.38 illust
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establishment period. For the offic
Page 156 and 157:
Vanuatu 101 Airports Vanuatu Limite
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Samoa 104 The Samoa Airport Authori
Page 160 and 161:
Institutional Arrangements in Aviat
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Summary of Aviation Analysis The Pa
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Fiji Kiribati Marshall Islands Micr
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Barbados Dominica Grenada Jamaica M
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Samoa Solomon Islands Timor-Leste T
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Samoa Solomon Islands Timor-Leste T
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“A-Z World Airports Online” www
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